Look’s BDU licence trumps exemption for wireless telco mobile TV, CEO says

The head of multi-point distribution system (MDS) operator Look Communications Inc. says the CRTC’s recent exemption order for telco-based mobile video services is a vindication of its strategy – and a development that may forestall more competition from such sources. "This continues to put in a very narrow niche the cellular industry’s ability to broadcast any kind of video content, and in fact it really restricts them to unicasting," says Gerald McGoey, vice-chair and CEO of Milton ON-based Look. "This is just basically calling up something, one-to-one, and streaming it down, as opposed to broadcasting." Over the past two decades, MDS technology as a fixed-location service has struggled due to line-of-sight requirements, making it less attractive than alternatives such as direct-to-home (DTH) satellite for many broadcast applications. Mobility has, therefore, become the key to survival for companies such as Look. The biggest MDS operators in Canada include Saskatchewan’s Image Wireless Communications Inc. and Craig Wireless International Inc., which serves parts of Manitoba and BC with its Stream:1 IPTV service. All three services had their licences renewed until 2011 in Public Notice 2004-63, and Look’s licence includes 100 MHz of contiguous spectrum in the most populous regions of Ontario and Quebec. In Public Notice 2006-47, the CRTC sought to clarify the question of whether the mobile video services offered by wireless telcos such as Rogers Wireless, Telus Mobility and Bell Mobility should be covered by the 1999 New Media Exemption Order, which frees distribution systems based on IP networks from regulation. The commission proposed a new exemption for such services as long as they were delivered through mobile devices, and provided they obtain prior consent from broadcasters for retransmission of their signals. In their comments, television broadcasters, distributors and producers proclaimed that the proposed order was too broad, while wireless carriers expressed concerns that it might not be broad enough. In last week’s Public Notice 2007-13, the regulator issued a new exemption order that seemed to arrive at an equitable compromise for all parties: it took the original two conditions and added two more, namely that mobile television broadcasting undertakings be eligible for – but not necessarily possess – a broadcast licence, and that the service use point-to-point technology for distribution rather than a point-to-multipoint system. That latter stipulation might seem to preclude Look, but the commission made it clear in Public Notice 2006-47 that Look’s 2004 licence was sufficient and that the company needed no further exemption. The point-to-point provision in PN 2007-13 handicaps telcos by restricting them to one-to-one broadcasting, something McGoey says "is interesting, a pretty inefficient way to broadcast. Anyone who would use it is using it because they have to, not because they choose to." In its original 1987 regulatory policy governing MDS as well as other then-emergent technologies such as DTH and subscription television (STV), the commission noted that it "envisaged that MDS might be used by an existing cable operator to extend its service into less populated areas within its authorized service area, or by a third party to deliver services to unserved areas." The licensing of two national DTH television providers in 1998 all but killed the business case for a standalone MDS operation, but the ability to broadcast a TV channel lineup to mobile devices out of the reach of the regulator might have the opposite effect and brighten Look’s future. Not only does the new mobile TV broadcasting undertaking exemption order provide a much-needed boost to Look as it searches for a buyer, but it could actually increase the value of the company because it is seemingly now the only wireless cableco in Canada with plans to launch a multi-casting mobile TV service. It’s unclear at this point whether the service is going to be particularly attractive to Canadian users, but activity south of the border– AT&T recently inked an agreement to use Qualcomm Inc.’s MediaFLO multi-casting technology for its mobile TV services – should give us a glimpse into the future. With a Canadian spectrum auction likely set for later this year or early next year, the value of Look’s spectrum could also experience an increase in valuation as it can be used to provide additional mobile services. But for Look to offer mobile services such as voice, data or broadband access, it would have to return one-third of its 100 MHz of spectrum to the department. Despite the benefits that might accrue from the new exemption order, Look’s parent company, Unique Broadband Systems Ltd., is still working with investment banking firm Greenhill & Company to "explore strategic alternatives," which may include the outright sale of Look to Inukshuk, Telus Corp. or any of the cable companies. Says McGoey: "Look has two magnificent assets that aren’t even on its balance sheet, obviously: its broadcast licence and its spectrum."

Look’s BDU licence trumps exemption for wireless telco mobile TV, CEO says

Broadcast | February 14, 2007

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